Question 17 of 22
Q.What is Clean Loan ?
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2024Subjective· 2mImportance★★★★★
77% · 17/22 Questions
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Start your 14-day free trial to unlock the full solution →A clean (unsecured) loan is one advanced by a bank without demanding any security or collateral, relying only on the borrower's creditworthiness and personal guarantee.
In the Tamil Nadu HSC Commerce syllabus, lending money is a primary function of commercial banks. Loans can be secured (against pledge, mortgage or hypothecation of assets) or unsecured.
- Meaning: A clean loan is an advance given without any tangible security. The bank does not hold any asset as cover for the loan.
- Basis: It is sanctioned on the strength of the borrower's reputation, credit record, repaying capacity and sometimes a personal guarantee or surety. …
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